Stock Picks From a 3-Star Fund Manager

CNBC.com

Tuesday, 23 Oct 2007 | 12:35 PM ETCNBC.com

SHARES

Steven Neimeth, portfolio manager of the SunAmerica Value Fund -- rated three stars by Morningstar -- sees plenty of positives in this turbulent market. The strategist offered CNBC his view of the economy -- and named the stocks he likes.

A Positive Outlook on the Markets

A look at where you should be putting your money, with Steven Neimeth, SunAmerica Value Fund portfolio manager, and CNBC's Mark Haines

"The GDP still looks decent," said Neimeth, predicting 3 percent growth. "Jobs are still strong, inflation under control and corporate profits are pretty decent for the most part."

The strategist predicts that the Federal Reserve will enact another rate cut very soon, and "concern for credit markets" will lead to help for those with mortgage exposure.

Neimeth's picks:

Financials. He says it is important to own shares in this sector, and bought Merrill Lynch on weakness. Excluding Merill's investment in BlackRock and Bloomberg, "it's trading at 0.9 times book."

Retail. Neimeth puts both American Eagle Outfitters and media giant News Corp. in this category; his fund holds shares in both "consumer" companies.

Energy. The strategist has been underweight in the sector, citing "too many speculators" -- but says that's due for a turnaround. He likes Marathon Oil, which is "fairly cheap" with "big finds in Angola."